Wall Street Sees Macy's Q1 Profit Up Double-Digits

Wall Street expects Macy's (M) to keep up its winning streak when it reports first-quarter results before the bell on Wednesday.

Analysts polled by Thomson Reuters forecast the largest U.S. department store operator will ring up a 23% increase in earnings to 53 cents a share. That would be the fifth straight quarter of double-digit profit growth and an acceleration from the 21% gain it saw in the fourth quarter. They see a 4% rise in revenue to $6.39 billion.

Macy's runs about 840 stores under the Macy's and Bloomingdale's names.

It's earnings growth has outpaced the rest of the department store space since the first quarter of 2011, and it's expected to do so in the first quarter, says Ken Perkins, president of Retail Metrics. Analysts forecast the segment's first-quarter earnings will be down 17%, compared with the 23% gain seen for Macy's, Perkins says.

Perkins says analysts' expectations for the department store group have been dragged down by underperformers Sears Holdings (SHLD) and J.C. Penney (JCP) .

J.C. Penney, he says, has "ceded" share to Macy's and others.

Perkins attributes Macy's standout performance to initiatives such as its "My Macy's" strategy, which tailors stores and merchandise assortments to local customer needs and preferences in each location.

Macy's, he adds, has also been very much ahead of curve in terms of its so-called "omnichannel" strategy aimed at serving the customer whenever, however, and wherever she wants to shop.

The omnichannel initiative involves bringing together Macy's efforts in stores, online and mobile in a manner that satisfies emerging shopping patterns and capitalizes on the strength of its inventory regardless of where the customer demand occurs, CEO Terry Lundgren said in a press release.

Macy's has been on target with fashion, says Perkins.

And it's seen success with its exclusive brands.

Two other members of the department store group will report first-quarter results Thursday — value-oriented chain Kohl's (KSS) and high-end department store operator Nordstrom (JWN).

Analysts expect Nordstrom to see a 9% increase in earnings to 76 cents a share, when it reports after the close. They see a 7% rise in sales to $2.80 billion.

They forecast Kohl's will see a 10% decline in earnings to 57 cents a share. They expect a 0.8% rise in sales to $4.275 billion.

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07/20/2015 03:08 PM ET

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